Tax hike on cigarettes could raise revenues by Tk10,000cr: Atiur Rahman
Speakers at the dialogue acknowledged that the tax increase could potentially raise the illegal cigarette trade in the country
Former Bangladesh Bank governor Atiur Rahman proposed raising taxes on cigarettes, saying the hike may add Tk10,000 crore to public revenues while significantly reducing smoking rates.
Speaking at a dialogue today, Atiur said, "Low taxes are shooting up consumption of cheap cigarettes in the country, leading to low revenues despite their high sales."
Citing researchers, speakers at the dialogue, organised by the Unnayan Shamannay, said medical expenses for smoking-related illnesses significantly surpass revenue from tobacco sales.
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In 2017-18 alone, this disparity reached at least 34% when a staggering 1,61,000 people died from tobacco use, they added.
A set of proposals were presented at the event. They included a significant increase in prices of cigarette, Bidi and smokeless tobacco products, and imposing supplementary duties on them.
Addressing the programme, Ferdous Ahmed, a film star and Dhaka-10 MP, said, "A tax increase on cigarettes in the high range will decrease consumption."
He also advocated for stopping the sale of cigarettes without a whole pack or to people under the age of 18.
The price hike was proposed to make cigarettes less affordable, particularly to low-income groups and teenagers who primarily consume cheaper brands. The highest price increase of 33% was suggested for this category.
And 19%, 15%, and 13% tax hikes were proposed for middle, high, and premium category cigarettes, respectively.
Giving the example of narcotics, SM Zulfiqar Ali, research director at the Bangladesh Institute of Development Studies said even after a rise in drug prices, their consumption did not decrease significantly.
The speakers also acknowledged that the tax increase could potentially raise the illegal cigarette trade in the country.
Drawing attention to the illegal trade due to the price hike, Nazmul Islam, associate professor of Buet, said, "Policy makers should not only look at cigarette price hikes but also the possibility of illegal trade as a result of that."
